Spotify in talks of purchasing SoundCloud

Spotify is reportedly in advanced talks to purchase SoundCloud, according to a report from the Financial Times. The move would give Spotify a larger library of content — SoundCloud has over 125 million songs — and remove a competitor from the streaming music landscape after SoundCloud launched its own paid service earlier this year. But outside of that the benefits of the acquisition seem limited for Spotify.

For SoundCloud, the deal makes much more sense. The Berlin-based company’s on-demand service SoundCloud Go has failed to catch on in any noticeable way. With Spotify headed for an IPO, likely sometime in the summer of 2017, according to sources, the acquisition could turn out very well for SoundCloud and its investors, one of which is Twitter, which dumped $70 million into the company back in June.

If the deal does happen, a purchase price around SoundCloud’s $700 million valuation wouldn’t hurt Spotify’s pockets too much — the company is valued at $8.5 billion — but it would keep the pressure on Spotify to go through with its IPO sooner rather than later. Spotify declined to comment on the potential deal.